Milton Friedman on Government Reform

Libertarian Economist

County level better than state; state better than federal

As conservatives, we believe that as many decisions as possible should be pushed down to the local level. This is not only a matter of efficiency, it is fundamental to our freedoms. As Milton Friedman explains in "Capitalism and Freedom," "If
government is to exercise power, better in the county than in the state, better in the state than in Washington. If I do not like what my local community does, be it in sewage disposal, or zoning, or schools, I can move to another local community.
If I do not like that my state does, I can move to another. If I do not like what Washington imposes, I have few alternatives in this world of jealous nations."

If we believe in local government, then the last thing we want to do is decimate the
ability of local officials to effectively serve their citizens. We want local communities to keep our streets clean, keep our citizens safe, and give our children the best possible education.

Greatest threat to freedom is concentrated power

The Constitution was created because the founders knew from thousands of years of human history that power concentrated in the hands of a few inevitably led to the disappearance of basic human rights.
Renowned economist Milton Friedman, in his book Capitalism and Freedom, stressed this very point:

"Our minds tell us, and history confirms that the great threat to freedom is the concentration of power.
Government is necessary to preserve our freedom, it is an instrument through which we can exercise our freedom; yet by concentrating power in political hands, it is also a threat to freedom.
Even though the men who wield this power initially be of good will and even though they be not corrupted by the power they exercise, the power will both attract and form men of a different stamp."

The argument for collectivism is simple; free market is not

The siren song of socialism that has lured Europe and almost every other nation in history now has America in its trance. Political salesmen for collectivism are irresistible; their pitch is always more attractive to uninformed voters. Economist Milton
Friedman explains:

The argument for collectivism, for government doing something, is simple. Anybody can understand it. "If there's something wrong, get Mr. X to help them out." The argument for voluntary cooperation, for a free market, is not nearly
so simple. It says, "You know, if you allow people to cooperate voluntarily and don't interfere with them, indirectly, through the operation of the market, they will improve matters more than you can improve it directly by applauding somebody."
That's a subtle argument, and it's hard for people to understand. Moreover, people think that when you argue that way you're arguing for selfishness, for greed. That's utter nonsense.

Problem is concentrated benefits & dispersed costs

The problem we face, to paraphrase economist Milton Friedman, is that government programs have concentrated benefits and dispersed costs. Those who benefit from a government program REALLY want that program.
Taxpayers may not want to pay for it, but they don't object because the cost of each new program is usually so widely dispersed that it is almost imperceptible. This problem is most acute at the federal level, where the costs of a new program are
dispersed among the largest number of taxpayers.

But an expenditure is not justified merely because each taxpayer's loss may be less than each beneficiary's gain; that just means the program's true cost will be relatively easy to disguise.
When we consider the aggregated cost of countless government programs, we see how the problem of concentrated benefits and dispersed costs lead to a steady and dangerous, albeit subtle, erosion of liberty and property.

If government ruled the Sahara, there'd be a sand shortage

"If you put the federal government in charge of the Sahara Desert," Milton Friedman once said, "in five years there would be a shortage of sand." As if determined to prove Friedman right, a panel of experts created by Congress to oversee the
TARP program found that the Treasury Department significantly overpaid for the stakes it took to financial institutions. The TARP bailout proved once again that when it comes to policy that can shape foreign policy or financial systems, haste makes waste

Source: The Last Best Hope, by Joe Scarborough, p. 85-6
, Oct 5, 2010

Government power must be dispersed

Economics came on my radar screen when I was 12 or 13, when someone gave me a copy of "Capitalism & Freedom" by Milton Friedman, one of the greatest advocates of capitalism. "Government power must be dispersed. If government is to exercise power, better
in the country than in the state, better in the state than in Washington," he wrote. Reading Friedman led me to next plow through Adam Smith's "Wealth of Nations." The pinmaker, the division of labor, and the "invisible hand"--all of it made sense to me.

Source: Courage and Consequence, by Karl Rove, p. 7
, Mar 9, 2010

Collectivism argument is simple; free market's is subtle

The argument for collectivism, for government doing something, is simple. Anybody can understand it. "If there's something wrong, pass a law. If somebody is in trouble, get
Mr. X to help them out." The argument for voluntary cooperation, for a free market, is not nearly so simple.
It says, "You know, if you allow people to cooperate voluntarily and don't interfere with them, indirectly, through the operation of the market, they will improve matters more than you can improve it dir3ectly by appointing somebody."
That's a subtle argument, and it's hard for people to understand it. Moreover, people think that when you argue that way you're arguing for selfishness, for greed. That's utter nonsense.

Free society requires putting up with temporary evils

"The maintenance of a free society is a very difficult and complicated thing. And it requires a self-denying ordinance of the most extreme kind. It requires a willingness to put up with temporary evils on the basis of the subtle and sophisticated
understanding that if you step in to try to do something about them, you not only may make them worse, but you will spread your tentacles and get bad results elsewhere." --Milton Friedman

In 2008, I tried to pass a one-year moratorium on earmarks, but it failed after the leadership of both parties maneuvered appropriators to pressure members to oppose the bill. But we're making progress.
Americans are beginning to catch on and more are beginning to oppose earmarks.

Economic power decentralizes; political power does not

Economic power can be widely dispersed. The growth of new centers of economic strength [isn't] at the expense of existing centers. Political power, on the other hand, is more difficult to decentralize. There can be numerous small independent governments.
But it is far more difficult to maintain numerous equipotent small centers of political power in a single large government than it is to have numerous centers of economic strength in a single large economy. There can be many millionaires in one large
economy. But can there be more than one really outstanding leader? If the central government gains power, it is likely to be at the expense of local governments. There seems to be something like a fixed total of political power to be distributed.
Consequently, if economic power is joined to political power, concentration seems almost inevitable. On the other hand, if economic power is kept in separate hands from political power, it can serve as a check and a counter to political power.

No need to maintain post offices as a public monopoly

There is no way to justify our present public monopoly of the post office. It may be argued that the carrying of mail is a technical monopoly and that a government monopoly is the least of evils. [That does not] justify the present law, which makes it
illegal for anybody else to carry mail. If the delivery of mail is a technical monopoly, no one will be able to succeed in competition with the government. If it is not, there is no reason why the government should be engaged in it. The only way to find
out is to leave other people free to enter.

The historical reason why we have a post office monopoly is because the Pony Express did such a good job of carrying the mail that, when the government introduced transcontinental service, it couldn't
compete effectively and lost money.

I conjecture that if entry into the mail-carrying business were open to all, there would be a large number of firms entering it and this archaic industry would become revolutionized in the short order.